Business Strategy: Analysis of IKEA's Macro Environment and Internal Capabilities

Business strategy

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Task 1...............................................................................................................................................3
Company overview......................................................................................................................3
PESTLE Analysis........................................................................................................................4
Stakeholder analysis....................................................................................................................5
Task 2...............................................................................................................................................7
Resources based review analysis.................................................................................................7
VRIO of IKEA.............................................................................................................................7
SWOT analysis............................................................................................................................8
Task 3...............................................................................................................................................9
Porters five forces........................................................................................................................9
TASK 4..........................................................................................................................................11
Strategic plan.............................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy is considered to be the aspect of companies with the set course of actions or
decisions which is helpful in assisting the specific level of business objectives in perfect manner.
In addition to that, business strategy has the set level of competitive moves along with action in
order to attracts their customer to compete successfully with competitor by strengthening the
performance and more level of organizational goals achievement. Ikea is the globally recognized
firm which is being known for its low prices along with innovative designed furniture ( Pagliari
and Moxon, 2020). In ths report there will be clear discussion of the influence of macro
environment on the business IKEA along with critical evaluation of internal environment and
respective capabilities. Hence the business target will be identified as the long-term strategic
game plan which have been designed to achieve set level of goals and objectives. The report will
also be extended to the application of porter five model to the appropriate implementation of the
strategic direction plan in order to have the improvements in competitive edge.
MAIN BODY
Task 1
Company overview
IKEA is the internationally known as the home furnishing retailers which is growing rapidly as
the world largest level of furniture retailer recognized by the Scandian style. The majoritic of the
furniture is the flat pack which is ready to assemble with more level of ranges including more
level of home furniture and accessories in perfect manner. The company have ranged in more
than 9500 variety of products with more level of wide ranges available in IKEA stores along
with online through IKEA websites in perfect manner.
Vision
The company vision is to create a better every day for the many people, customer along with the
co-workers who work as suppliers with company.
Mission
The company want to support the vision by the offering the wide ranges of well-designed
functional home furnishing products at the low prices in order to increase the level of
affordability.
Business idea
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The business idea is to have the creation of product with respective beautiful design, good
function along with sustainably and quality which can be available at lower price. The firm have
the call for democratic deigning which believe.
PESTLE Analysis
As the IKEA is complicated firm with one stop for the all the needs household needs with
cultural insensitivity with in regards to the resulted level of customer injury or death (Eskerod
and Larsen, 2018). The company is the old as IKEA which is serving the customer since the
year 1943 have been bound with varsity of problems in which pestle analysis will be helpful in
uncovering the more level of recent conversion along with respective growth and challenges.
Political factor
The firm is facing the political situation in the markets as the impact of government attitude
towards the brand and political stability. This have inclusion in level of bureaucracy, degree of
corruptions with import restrictions to be operating as the global furniture. The company have
been imprisoned with the with political issues on political ground was the using of prison labour
at manufacturing sites. There is policy of visiting production facilities to control working
processes, access to East German suppliers had been restricted. On the other hand, furniture’s
retailer has been engaged in the lobbying activities which significant considered o be lower to
the lobbying spending of the other multinational companies in similar sizes.
Economic factor
As the economic factor the macroeconomic situation and the consumer spending have the major
level of impact on company performance. Hence there is the negative level of impact of crisis for
the IKEA which is been extended to the other countries due to the cost leadership strategy of
business (D’Agostino and et.al., 2020). In addition to the changes in currency have more level to
be affected as fluctuation in between EUR and USD and other major currencies due to the global
scale of business operations. In addition to Fluctuations of costs of raw materials such as wood
and metals IKEA uses is a major economic factor that also impacts the business significantly.
Social factor
Knowing the local culture is the rule of every business should follow b marketing each and
every material as the efforts of IKEA have not well received. The company have the following
mistake such as putting the homosexuality in the Russian catalogue where is is considered to be
very shameful along with putting women on the Saudi Arabians catalogue which have resulted
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